FX.co ★ Gold Declines As Dollar Consolidates On Rate Hike Bets

Gold prices fell more than 1 percent on Thursday and the dollar strengthened on safe-haven demand, as red-hot U.S. inflation data fueled expectations about even more aggressive Federal Reserve monetary tightening at the upcoming policy meeting on July 26-27.

Spot gold fell 1.1 percent to $1,716.33 per ounce, while U.S. gold futures were down 1.2 percent at 1,714.

Fed Governor Christopher Waller is scheduled to speak later today amid speculation the Federal Reserve could raise its target fed funds rate by 1 percentage point at its July 26-27 meeting.

"Everything is in play," Atlanta Federal Reserve Bank President Raphael Bostic said during a tour of Tampa and St. Petersburg.

In a surprise move, the Bank of Canada on Wednesday lifted its benchmark interest rate by 100 basis points to tame high inflation.

June's producer price report may also offer more clues on what the Fed might do to curb 40-year high inflation.

The closely watched 2-year/10-year yield curve remained inverted, in a sign that the Fed's steeper rate hikes could push the economy into a recession.